In 2012, a Full-Time Worker Earning the Federal Minimum Wage

question 16

Multiple Choice

In 2012, a full-time worker earning the federal minimum wage of $7.25 per hour, and who was married with one child, was

• A) earning a middle-class income.
• B) living below the poverty line.
• C) twice as likely to go back to school as someone earning $2.15 more.
• D) likely to have a good benefits package, with health care and retirement.

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Definitions:

Compounded Annually

Describes the process of calculating interest on both the initial principal and the accumulated interest from previous periods once a year.

Present Value

The present value of a future amount of money or series of cash flows using a predetermined rate of return.

Perpetuity

A financial term for a stream of cash payments that continue indefinitely.

Semi-Annually

A term indicating something occurs twice a year.